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Predictive algorithms are no better at telling the future than a crystal ball

An increasing number of businesses invest in advanced technologies that can help them forecast the future of their workforce and gain a competitive advantage. Many analysts [bersin.com] and professional practitioners [hrtechnologist.com] believe that, with enough data, algorithms embedded in People Analytics (PA) applications can predict all aspects of employee behavior: from productivity, to engagement, to interactions and emotional states.

Predictive analytics powered by algorithms are designed to help managers make decisions that favourably impact the bottom line. The global market for this technology is expected to grow from US$3.9 billion in 2016 to US$14.9 billion by 2023 [reuters.com].

Despite the promise, predictive algorithms are as mythical as the crystal ball of ancient times.

[...] To manage effectively and develop their knowledge of current and likely organisational events, managers need to learn to build and trust their instinctual awareness of emerging processes rather than rely on algorithmic promises that cannot be realised. The key to effective decision-making is not algorithmic calculations but intuition [openlibrary.org].